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Former Spokane Man Sentenced to Prison for Defrauding Investors in Ethanol Plant Scheme

Spokane –Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Robert J. Braun, age 55, originally of Spokane, was sentenced today in United States District Court after pleading guilty to five counts of wire fraud and one count of securities fraud. Senior United States District Court Judge Robert H. Whaley, Jr. sentenced Braun to a three year term of imprisonment for his role in defrauding dozens of investors in the Spokane area. The Court also ordered Braun to pay $1,482,250 in restitution and imposed three years of court supervision following his release from Federal prison.

According to information disclosed during court proceedings, Braun told investors that he was raising funds for an ethanol plant that would be built in the Spokane area. Braun told investors they would be repaid their investment within a few months, and would then earn extraordinary dividends annually. Braun used the business names Novahol Spokane, LLC and S & B Energy Spokane, LLC in furtherance of his scheme.

As part of his fraudulent scheme, Braun used investor funds for personal living expenses, including more than $150,000 on mortgage payments and expenses for three homes, more than $50,000 at department and clothing stores, and more than $80,000 for a women’s shoe and accessory store that he owned in downtown Spokane (Boutique 238). Braun solicited several victims when his bank accounts had low or negative account balances. Between 2008 and 2012, Braun lulled investors into a false sense of security through a series of emails that claimed that billions in funding for the ethanol plant was imminent.

Michael C. Ormsby said, “Investors should be wary of any investment opportunity that seems too good to be true, even if someone they know and trust introduces them to the opportunity. Perpetrators of fraud are aware of the fears of investors and can tailor their schemes to convince even the most cautious investors to part with their money.” Michael C. Ormsby added that, “The sentence imposed in this case will send the right message to would be fraudsters that their schemes will be prosecuted and punished.”

The investigation was conducted by the Federal Bureau of Investigation, the Washington State Department of Financial Institutions (DFI), and the Internal Revenue Service Criminal Investigation (IRS-CI). The case was prosecuted by Assistant United States Attorneys K. Jill Bolton and George J.C. Jacobs, III, as well as Special Assistant United States Attorney Robert Kondrat, a DFI attorney cross-designated to the United State Attorney’s Office to prosecute securities fraud cases.